“This has been a year of transition for Teva, underscored this quarter
by the close of our strategic acquisition of Actavis Generics, which had
significant contribution to our results. Actavis will continue to
contribute in a meaningful way to the future growth of our generics
business through the strengthened R&D capabilities and complementary
pipeline and portfolio, and enhance our leadership in an increasingly
evolving industry,” stated Erez Vigodman, Teva’s President and CEO. “We
were also pleased to report this quarter that we have successfully
completed the second pivotal phase three study for SD-809 for tardive
dyskinesia and plan to submit that NDA to the U.S. FDA at the end of
this year, and have also resubmitted SD-809 for Huntington disease in
response to the FDA's Complete Response Letter. Going forward, we will
focus on also growing our specialty pipeline through in-house
opportunities, including in the development and commercialization of our
key pipeline assets, most notably our anti-CGRP product for migraine
headaches and fasinumab. In the face of the industry and
company-specific challenges we have been dealing with this year, we
remain excited about the future as we strive to create a platform that
is unique to the industry, working every day to find the delicate
balance between access and innovation and laying the foundation for
Teva's continued growth.”

Third Quarter 2016 Results

Revenues in the third quarter of 2016 were $5.6 billion, up 15%
compared to the third quarter of 2015, primarily due to the inclusion of
revenues of $887 million of the Actavis generics business, following the
closing of the acquisition on August 2. Excluding the impact of foreign
exchange fluctuations, revenues increased 19%.

Exchange rate differences between the third quarter of 2016 and
the third quarter of 2015 reduced revenues by $188 million, GAAP
operating income by $83 million and non-GAAP operating income by $65
million.

GAAP gross profit was $2.8 billion in the third quarter of 2016,
up 1% compared to the third quarter of 2015. GAAP gross profit margin
was 50.4% in the quarter, compared to 57.5% in the third quarter of
2015. Non-GAAP gross profit was $3.4 billion in the third quarter
of 2016, up 14% from the third quarter of 2015. Non-GAAP gross profit
margin was 61.0% in the third quarter of 2016, compared to 61.8% in
the third quarter of 2015.

Research and Development (R&D) expenses for the third quarter
of 2016 amounted to $663 million, an increase of 84% compared to the
third quarter of 2015 mainly due to $250 million paid to Regeneron
pursuant to our collaborative agreement to develop and commercialize its
pain medication product fasinumab. R&D expenses excluding equity
compensation expenses and purchase of in-process R&D in the third
quarter of 2016 were $406 million, compared to $356 million in the third
quarter of 2015. R&D expenses were 7.3% of revenues in the quarter,
compared to 7.4% in the third quarter of 2015. R&D expenses related to
our generic medicines segment were $184 million, compared to $132
million in the third quarter of 2015, an increase of 39%, mainly due to
the inclusion of two months of expenses of the Actavis generics
business. R&D expenses related to our specialty medicines segment were
$228 million, an increase of 4% compared to $220 million in the third
quarter of 2015.

Selling and Marketing (S&M) expenses in the third quarter of
2016 amounted to $940 million, an increase of 21% compared to the third
quarter of 2015. S&M expenses excluding amortization of purchased
intangible assets and equity compensation expenses were $889 million, or
16.0% of revenues, in the third quarter of 2016, compared to $766
million, or 15.9% of revenues, in the third quarter of 2015. S&M
expenses related to our generic medicines segment were $415 million, an
increase of 41% compared to $295 million in the third quarter of 2015,
or 51% in local currency terms. The increase was mainly due to
additional costs related to the inclusion of two months of expenses of
the Actavis generics business and the launch of our business venture in
Japan in the second quarter of 2016. S&M expenses related to our
specialty medicines segment were $458 million, an increase of 10%
compared to $417 million in the third quarter of 2015. The increase was
mainly due to higher investments in new launches in the third quarter of
2016 and lower S&M activities in the third quarter of 2015.

General and Administrative (G&A) expenses in the third
quarter of 2016 amounted to $310 million, compared to $316 million in
the third quarter of 2015. G&A expenses excluding equity compensation
expenses were $304 million in the third quarter of 2016, or 5.5% of
revenues, compared to $307 million and 6.4% in the third quarter of 2015.

In light of advanced discussions with the U.S. Department of Justice and
the U.S. Securities and Exchange Commission to settle our
previously-disclosed FCPA investigations, we are establishing a
provision of approximately $520 million. The provision relates to
conduct in three countries, Russia, Mexico and Ukraine, during the time
period covering 2007-2013. None of the conduct in question involved
Teva's U.S. business.

Upon learning of FCPA concerns in 2012, Teva accelerated the pace of
changes to address these issues by completely transforming its
governance program and processes on every level. This resulted in
actions including, terminating problematic business relationships with
third parties, separating relevant employees from the company, fully
overhauling the management of several subsidiaries, and ceasing
operations in several countries. The company has also restructured
through a new global organizational structure and chain of command that
reduces risks.

The compliance program that Teva has in place now is serious, rigorous,
and comprehensive and is designed to protect the company and its
subsidiaries against future violations. Today, Teva has a culture of
compliance that begins with a strong tone at the top -- including
executive regional and local management -- and underpins every single
business decision.

Quarterly GAAP operating income was $0.8 billion in the third
quarter of 2016, down 24% compared to $1.0 billion in the third quarter
of 2015. Quarterly non-GAAP operating income was $1.8 billion, up
16%, compared to $1.6 billion in the third quarter of 2015.

Adjusted EBITDA (non-GAAP operating income, which excludes
amortization and certain other items, and excluding depreciation
expenses) was $1.9 billion, up 16% compared to $1.7 billion in the third
quarter of 2015.

GAAP financial expenses for the third quarter of 2016 were $150
million, compared to $697 million in the third quarter of 2015. Expenses
in the third quarter of 2015 were mainly the result of a $623 million
loss on our shares of Mylan, reflecting the price of Mylan’s shares as
of September 30, 2015, while expenses in the current quarter were
affected by the borrowings used to finance the acquisition of the
Actavis generics business. Non-GAAP financial expenses were $151
million in the third quarter of 2016, compared to $65 million in the
third quarter of 2015.

GAAP income tax expenses for the third quarter of 2016 were $207
million, or 34% on pre-tax income of $615 million. In the third quarter
of 2015, the provision for income taxes was $193 million, or 62% on
pre-tax income of $313 million. The provision for non-GAAP income
taxes for the third quarter of 2016 was $261 million on pre-tax
non-GAAP income of $1.6 billion, for a quarterly tax rate of 16%. The
provision for non-GAAP income taxes in the third quarter of 2015 was
$319 million on pre-tax non-GAAP income of $1.5 billion, for a quarterly
tax rate of 21%.

We expect our annual non-GAAP tax rate for 2016 to be 18%, mainly due to
synergies associated with the acquisition of the Actavis generics
business and nonrecurring tax benefits in jurisdictions with higher tax
rates.

GAAP net income attributable to Teva and GAAP diluted EPS
were $412 million and $0.35, respectively, in the third quarter of 2016,
compared to $103 million and $0.12, respectively, in the third quarter
of 2015. Non-GAAP net income attributable to ordinary
shareholders for calculating diluted EPS and non-GAAP diluted EPS were
$1.4 billion and $1.31, respectively, in the third quarter of 2016,
compared to $1.2 billion and $1.35 in the third quarter of 2015.

For the third quarter of 2016, the weighted average outstanding
shares for the fully diluted earnings per share calculation was 984
million on a GAAP basis and 1,044 million on a non-GAAP basis. The
number of average weighted diluted shares outstanding used for the fully
diluted share calculation for the third quarter of 2015 was 862 million
shares, on both a GAAP and non-GAAP basis. The increase in the number of
shares resulted from our December 2015 equity offerings and from the
issuance of shares to Allergan in August 2016 in connection with the
closing of the Actavis acquisition. The number of shares on a non-GAAP
basis includes the potential dilution resulting from our mandatory
convertible preferred shares, which had a dilutive effect on our
non-GAAP earnings per share.

As of September 30, 2016, the fully diluted share count for calculating
Teva's market capitalization was approximately 1,088 million shares.

Non-GAAP information: Net non-GAAP adjustments in the third
quarter of 2016 were $952 million. Non-GAAP net income and non-GAAP EPS
for the quarter were adjusted to exclude the following items:

Legal settlements and loss contingencies of $533 million, primarily a
provision of approximately $520 million relating to the
previously-mentioned FCPA investigations;

Amortization of purchased intangible assets totaling $429 million, of
which $387 million is included in cost of goods sold and the remaining
$42 million in selling and marketing expenses. This includes
amortization expenses of $237 million related to Actavis' intangible
assets;

Acquisition and related expenses, including contingent consideration,
of $371 million, including $250 million paid to Regeneron pursuant to
our collaborative agreement to develop and commercialize its pain
medication product fasinumab and a contingent consideration expense of
$43 million related to Bendeka™ as well as expenses related to the
Actavis generics acquisition;

Inventory step-up of $152 million, related mainly to the acquisition
of the Actavis generics business;

Restructuring expenses of $115 million, related mainly to the
acquisition of the Actavis generics business;

Costs related to regulatory actions taken in facilities of $46 million;

Equity compensation expense of $31 million;

Impairment of long-lived assets of $29 million;

Net gain from other non-GAAP items of $678 million, including a net
gain of $693 million from the divestments of products in connection
with the acquisition of the Actavis generics business;

Minority interest adjustment of negative $22 million; and

Corresponding tax benefit of $54 million.

Teva believes that excluding such items facilitates investors'
understanding of its business. See the attached tables for a
reconciliation of the GAAP results to the adjusted non-GAAP figures.

Cash flow from operations generated during the third quarter of
2016 was $1.5 billion, an increase of 34% compared to the third quarter
of 2015. The increase was mainly due to lower payments for legal
settlements, partially offset by an increase in accounts receivable, net
of SR&A, and an increase in inventories. Cash flow was affected by the
inclusion of two months of the generic business of Actavis. Free cash
flow, excluding net capital expenditures, was $1.2 billion, up 27%
compared to the third quarter of 2015.

Total balance sheet assets were $98.7 billion as of September 30,
2016, compared to $57.9 billion as of June 30, 2016. The increase was
mainly due to an increase of $19.7 billion of goodwill and an increase
of other intangible assets of $20.3 billion, both related mainly to the
Actavis acquisition.

Cash and investments at September 30, 2016 decreased to $2.7
billion, compared to $8.2 billion at June 30, 2016.

As of September 30, 2016, our debt was $36.9 billion, an increase
of $26.0 billion compared to $10.9 billion as of June 30, 2016. The
increase was mainly due to the $20.4 billion of debt issuances and the
$5.0 billion term loans borrowed to finance the Actavis acquisition. The
portion of total debt classified as short-term as of September 30, 2016
was 10%.

Total shareholders’ equity was $37.0 billion at September 30,
2016, compared to $32.0 billion at June 30, 2016.

Segment Results for the Third Quarter 2016

Generic Medicines Segment

Three Months Ended September 30,

2016

2015

U.S.$ in millions / % of Segment Revenues

Revenues

$

2,904

100.0%

$

2,202

100.0%

Gross profit

1,466

50.5%

1,005

45.6%

R&D expenses

184

6.3%

132

6.0%

S&M expenses

415

14.3%

295

13.4%

Segment profit*

$

867

29.9%

$

578

26.2%

* Segment profit consists of gross profit for the segment, less R&D and
S&M expenses related to the segment. Segment profit does not include G&A
expenses, amortization, inventory step-up and certain other items.

Generic Medicines Revenues

Generic medicines revenues in the third quarter of 2016 were $2.9
billion, an increase of 32% compared to the third quarter of 2015,
reflecting the results of operations of the Actavis generics business
from August 2, 2016. In local currency terms, revenues increased 35%.

Generic revenues consisted of:

U.S. revenues of $1.3 billion, an increase of 25% compared to the
third quarter of 2015, mainly due to the inclusion the generic
business of Actavis with revenues of $538 million.

European revenues of $829 million, an increase of 25%, or 31% in local
currency terms, compared to the third quarter of 2015, mainly due to
the inclusion the generic business of Actavis with revenues of $224
million.

ROW revenues of $782 million, an increase of 54%, or 60% in local
currency terms, compared to the third quarter of 2015. The increase in
local currency terms was mainly due to the results of our business
venture with Takeda in Japan which commenced operations in April 2016
and $93 million in revenues from Actavis.

API sales to third parties of $191 million (which is included in the
market revenues above), a decrease of 7%, compared to the third
quarter of 2015, due to lower revenues in both Europe and the United
States.

Generic medicines revenues comprised 52% of our total revenues in the
quarter, compared to 46% in the third quarter of 2015.

Generic Medicines Gross Profit

Gross profit from our generic medicines segment in the third quarter of
2016 was $1.5 billion, an increase of 46% compared to the third quarter
of 2015. The higher gross profit was mainly a result of the first time
inclusion of the generic business of Actavis and our business venture
with Takeda in Japan and higher gross profit of our API business as well
as lower expenses related to production.

Gross profit margin for our generic medicines segment in the third
quarter of 2016 increased to 50.5%, from 45.6% in the third quarter of
2015.

Generic Medicines Profit

Our generic medicines segment generated profit of $867 million in the
third quarter of 2016, an increase of 50% compared to the third quarter
of 2015. Generic medicines profitability as a percentage of generic
medicines revenues was 29.9% in the third quarter of 2016, up from 26.2%
in the third quarter of 2015.

Specialty Medicines Segment

Three Months Ended September 30,

2016

2015

U.S.$ in millions / % of Segment Revenues

Revenues

$

2,048

100.0%

$

2,178

100.0%

Gross profit

1,783

87.1%

1,859

85.4%

R&D expenses

228

11.1%

220

10.1%

S&M expenses

458

22.4%

417

19.1%

Segment profit*

$

1,097

53.6%

$

1,222

56.1%

* Segment profit consists of gross profit for the segment, less R&D and
S&M expenses related to the segment. Segment profit does not include G&A
expenses, amortization, inventory step-up and certain other items.

Specialty Medicines Revenues

Specialty medicines revenues in the third quarter of 2016 were $2.0
billion, a decrease of 6% compared to the third quarter of 2015. U.S.
specialty medicines revenues were $1.6 billion, down 8% compared to the
third quarter of 2015. European specialty medicines revenues were $406
million, an increase of 10%, or 12% in local currency terms, compared to
the third quarter of 2015. ROW specialty revenues were $84 million, down
22%, or 20% in local currency terms, compared to the third quarter of
2015.

Specialty medicines revenues comprised 37% of our total revenues in the
quarter, compared to 45% in the third quarter of 2015.

The decrease in specialty medicines revenues compared to the third
quarter of 2015 was primarily due to lower revenues in all our core
therapeutic areas.

The following table presents revenues by therapeutic area and key
products for our specialty medicines segment for the three months ended
September 30, 2016 and 2015:

Three Months Ended September 30,

PercentageChange

2016

2015

2016 - 2015

U.S. $ in millions

CNS

$

1,302

$

1,366

(5%)

Copaxone®

1,061

1,085

(2%)

Azilect®

101

92

10%

Nuvigil®

21

97

(78%)

Respiratory

270

285

(5%)

ProAir®

118

149

(21%)

QVAR®

96

92

4%

Oncology

269

326

(17%)

Treanda® and Bendeka™

149

207

(28%)

Women's Health

109

115

(5%)

Other Specialty

98

86

14%

Total Specialty Medicines

$

2,048

$

2,178

(6%)

Global revenues of Copaxone®(20 mg/mL and 40
mg/mL), the leading multiple sclerosis therapy in the U.S. and globally,
were $1.1 billion, a decrease of 2% compared to the third quarter of
2015.

Copaxone® revenues in the United States, were $874 million,
flat compared to the third quarter of 2015, as a price increase of 7.9%
in January 2016 was offset by a decrease in volume for Copaxone®
20 mg/mL. At the end of the third quarter of 2016, according to
September 2016 IMS data, our U.S. market shares for the Copaxone®
products in terms of new and total prescriptions were 27.0% and 29.2%,
respectively. Copaxone® 40 mg/mL accounted for over 83% of
total Copaxone® prescriptions in the U.S.

Copaxone® revenues outside the United States were $187
million, a decrease of 10%, or 8% in local currency terms, compared to
the third quarter of 2015 mainly due to loss of tender orders in Russia,
partially offset by an increase in volumes in Europe.

Our global Azilect® revenues were $101 million, an
increase of 10% compared to the third quarter of 2015. Global in-market
sales decreased 22% due to generic competition in certain European
markets.

Revenues of our respiratory products were $270 million, down 5%
compared to the third quarter of 2015. ProAir®
revenues in the quarter were $118 million, down 21% compared to the
third quarter of 2015, due to lower volumes related to changes in
insurers’ preferred medicines lists. QVAR®
global revenues were $96 million in the third quarter of 2016, up 4%
compared to the third quarter of 2015, mainly due to higher volumes sold.

Revenues of our oncology products were $269 million in the third
quarter of 2016, down 17% compared to the third quarter of 2015.
Revenues of Treanda® and Bendeka™ were $149
million, down 28% compared to the third quarter of 2015, mainly due to
lower volumes from normalization of channel inventory following the
transition from Treanda® to BendekaTM in the first
half of 2016 and competition from other therapies.

Specialty Medicines Gross Profit

Gross profit from our specialty medicines segment was $1.8 billion, down
$76 million compared to the third quarter of 2015. Gross profit margin
for our specialty medicines segment in the third quarter of 2016 was
87.1%, compared to 85.4% in the third quarter of 2015.

Specialty Medicines Profit

Our specialty medicines segment profit was $1.1 billion in the third
quarter of 2016, down 10% compared to the third quarter of 2015, due to
lower gross profit as well as increases in S&M and R&D expenses.

Specialty medicines profit as a percentage of segment revenues was 53.6%
in the third quarter of 2016, down from 56.1% in the third quarter of
2015.

The following tables present details of our multiple sclerosis franchise
and of our other specialty medicines for the three months ended
September 30, 2016 and 2015:

Multiple Sclerosis

Three months ended September 30,

2016

2015

U.S.$ in millions / % of MS Revenues

Revenues

$

1,061

100.0%

$

1,085

100.0%

Gross profit

982

92.6%

980

90.3%

R&D expenses

20

1.9%

16

1.5%

S&M expenses

76

7.2%

88

8.1%

MS profit

$

886

83.5%

$

876

80.7%

Other Specialty

Three months ended September 30,

2016

2015

U.S.$ in millions / % of Other Specialty Revenues

Revenues

$

987

100.0%

$

1,093

100.0%

Gross profit

801

81.2%

879

80.4%

R&D expenses

208

21.1%

204

18.7%

S&M expenses

382

38.7%

329

30.1%

Other Specialty profit

$

211

21.4%

$

346

31.7%

Other Activities

Our OTC revenues related to PGT were $356 million, an increase of
40% compared to $255 million in the third quarter of 2015. In local
currency terms, revenues increased 83%, mainly due to inflation in
Venezuela. PGT’s in-market sales were $496 million in the third quarter
of 2016, an increase of $115 million compared to the third quarter of
2015.

Other revenues were $255 million in the third quarter of 2016,
mostly from the distribution of third-party products in Israel and
Hungary, as well as from the contract manufacturing of products which
were required to be divested in connection with the acquisition of
Actavis, compared to revenues of $188 million in the third quarter of
2015. The increase was mainly due to revenues from contract
manufacturing services of $32 million, as noted above, as well as to
higher revenues from distribution in Israel.

Financial Outlook

We expect revenues for full year 2016 to be $21.6-$21.9 billion; we
expect revenues for the fourth quarter of year 2016 to be $6.2-$6.5.

Non-GAAP EPS for 2016 is expected to be $5.10-$5.20, based on a
weighted average number of shares of 1,020 million; non-GAAP EPS for
the fourth quarter of 2016 is expected to be $1.34-$1.44, based on a
weighted average number of shares of 1,077 million.

Cash flow from operating activities for 2016 is expected to be
$4.8-$5.0 billion; cash flow from operating activities for the fourth
quarter of 2016 is expected to be $1.0-$1.2 billion.

These estimates reflect management`s current expectations for Teva's
performance in 2016. Actual results may vary, whether as a result of
exchange rate differences, market conditions or other factors. In
addition, the non-GAAP figures exclude the amortization of purchased
intangible assets, costs related to certain regulatory actions,
inventory step-up, legal settlements and reserves, impairments and
related tax effects.

Dividends

On November 14, 2016, the Board of Directors declared a cash dividend of
$0.34 per ordinary share for the third quarter of 2016. For holders of
our ordinary shares that are traded on the Tel Aviv Stock Exchange, the
dividend will be converted into new Israeli shekels based on the
official exchange rate as of November 15, 2016. The record date will be
December 5, 2016, and the payment date will be December 20, 2016. Tax
will be withheld at a rate of 15%.

On November 14, 2016, the Board of Directors also declared a cash
dividend of $17.50 per Mandatory Convertible Preferred Share for the
third quarter of 2016. The record date will be December 1, 2016, and the
payment date will be December 15, 2016. Tax will be withheld at a rate
of 15%.

Conference Call

Teva will host a conference call and live webcast along with a slide
presentation on Tuesday, November 15, 2016 at 8:00 a.m. ET. to discuss
its third quarter 2016 results and overall business environment. A
question & answer session will follow.

In order to participate, please dial the following numbers (at least 10
minutes before the scheduled start time): United States 1-866-966-1396;
Canada 1-866-992-6802 or International +44(0) 2071 928000; passcode:
1843189. For a list of other international toll-free numbers, click here.

A live webcast of the call will also be available on Teva's website at: www.ir.tevapharm.com.
Please log in at least 10 minutes prior to the conference call in order
to download the applicable audio software.

Following the conclusion of the call, a replay of the webcast will be
available within 24 hours on the Company's website. The replay can also
be accessed until December 15, 2016, 9:00 a.m. ET by calling United
States 1-866-247-4222; Canada 1-866-878-9237 or International +44(0)
1452 550000; passcode: 1843189.

About Teva

Teva Pharmaceutical Industries Ltd. (NYSE and TASE: TEVA) is a leading
global pharmaceutical company that delivers high-quality,
patient-centric healthcare solutions used by millions of patients every
day. Headquartered in Israel, Teva is the world’s largest generic
medicines producer, leveraging its portfolio of more than 1,000
molecules to produce a wide range of generic products in nearly every
therapeutic area. In specialty medicines, Teva has a world-leading
position in innovative treatments for disorders of the central nervous
system, including pain, as well as a strong portfolio of respiratory
products. Teva integrates its generics and specialty capabilities in its
global research and development division to create new ways of
addressing unmet patient needs by combining drug development
capabilities with devices, services and technologies. Teva's net
revenues in 2015 were $19.7 billion. For more information, visit www.tevapharm.com.

This press release contains forward-looking statements, which are
based on management’s current beliefs and expectations and involve a
number of known and unknown risks and uncertainties that could cause our
future results, performance or achievements to differ significantly from
the results, performance or achievements expressed or implied by such
forward-looking statements. Important factors that could cause or
contribute to such differences include risks relating to: our ability to
develop and commercialize additional pharmaceutical products;
competition for our specialty products, especially Copaxone®
(which faces competition from orally-administered alternatives and
existing and potential generic versions); our ability to integrate
Allergan plc’s worldwide generic pharmaceuticals business (“Actavis
Generics”) and to realize the anticipated benefits of the acquisition
(and the timing of realizing such benefits); the fact that following the
consummation of the Actavis Generics acquisition, we are dependent to a
much larger extent than previously on our generic pharmaceutical
business; potential restrictions on our ability to engage in additional
transactions or incur additional indebtedness as a result of the
substantial amount of debt incurred to finance the Actavis Generics
acquisition; the fact that for a period of time following the Actavis
Generics acquisition, we will have significantly less cash on hand than
previously, which could adversely affect our ability to grow; the
possibility of material fines, penalties and other sanctions and other
adverse consequences arising out of our ongoing FCPA investigations and
related matters; our ability to achieve expected results from
investments in our pipeline of specialty and other products; our ability
to identify and successfully bid for suitable acquisition targets or
licensing opportunities, or to consummate and integrate acquisitions;
the extent to which any manufacturing or quality control problems damage
our reputation for quality production and require costly remediation;
increased government scrutiny in both the U.S. and Europe of our patent
settlement agreements; our exposure to currency fluctuations and
restrictions as well as credit risks; the effectiveness of our patents,
confidentiality agreements and other measures to protect the
intellectual property rights of our specialty medicines; the effects of
reforms in healthcare regulation and pharmaceutical pricing,
reimbursement and coverage; competition for our generic products, both
from other pharmaceutical companies and as a result of increased
governmental pricing pressures; governmental investigations into sales
and marketing practices, particularly for our specialty pharmaceutical
products; adverse effects of political or economic instability, major
hostilities or acts of terrorism on our significant worldwide
operations; interruptions in our supply chain or problems with internal
or third-party information technology systems that adversely affect our
complex manufacturing processes; significant disruptions of our
information technology systems or breaches of our data security;
competition for our specialty pharmaceutical businesses from companies
with greater resources and capabilities; the impact of continuing
consolidation of our distributors and customers; decreased opportunities
to obtain U.S. market exclusivity for significant new generic products;
potential liability in the U.S., Europe and other markets for sales of
generic products prior to a final resolution of outstanding patent
litigation; our potential exposure to product liability claims that are
not covered by insurance; any failure to recruit or retain key
personnel, or to attract additional executive and managerial talent; any
failures to comply with complex Medicare and Medicaid reporting and
payment obligations; significant impairment charges relating to
intangible assets, goodwill and property, plant and equipment; the
effects of increased leverage and our resulting reliance on access to
the capital markets; potentially significant increases in tax
liabilities; the effect on our overall effective tax rate of the
termination or expiration of governmental programs or tax benefits, or
of a change in our business; variations in patent laws that may
adversely affect our ability to manufacture our products in the most
efficient manner; environmental risks; and other factors that are
discussed in our Annual Report on Form 20-F for the year ended December
31, 2015 and in our other filings with the U.S. Securities and Exchange
Commission (the "SEC").

Forward-looking statements speak only as of the date on which they
are made and we assume no obligation to update or revise any
forward-looking statements or other information contained herein,
whether as a result of new information, future events or otherwise. You
are advised, however, to consult any additional disclosures we make in
our reports to the SEC on Form 6-K. Also note that we provide a
cautionary discussion of risks and uncertainties under “Risk Factors” in
our Annual Report on Form 20-F for the year ended December 31, 2015.
These are factors that we believe could cause our actual results to
differ materially from expected results. Other factors besides those
listed could also adversely affect us. This discussion is provided as
permitted by the Private Securities Litigation Reform Act of 1995.

Consolidated Statements of Income

(Unaudited, U.S. dollars in millions, except
share and per share data)

Three months ended

Nine months ended

September 30,

September 30,

2016

2015

2016

2015

Net revenues

5,563

4,823

15,411

14,771

Cost of sales

2,762

2,052

6,942

6,262

Gross profit

2,801

2,771

8,469

8,509

Research and development expenses

663

361

1,427

1,079

Selling and marketing expenses

940

780

2,731

2,562

General and administrative expenses

310

316

925

948

Impairments, restructuring and others

(410)

384

421

968

Legal settlements and loss contingencies

533

(80)

674

531

Operating income

765

1,010

2,291

2,421

Financial expenses – net

150

697

553

930

Income before income taxes

615

313

1,738

1,491

Income taxes

207

193

464

385

Share in (profits) losses of associated companies – net

(2)

4

(11)

7

Net income

410

116

1,285

1,099

Net income (loss) attributable to non-controlling interests

(2)

13

(17)

11

Net income attributable to Teva

412

103

1,302

1,088

Dividends on preferred shares

64

-

196

-

Net income attributable to ordinary shareholders

348

103

1,106

1,088

Earnings per share attributable to ordinary shareholders:

Basic ($)

0.35

0.12

1.18

1.28

Diluted ($)

0.35

0.12

1.17

1.26

Weighted average number of shares (in millions):

Basic

979

851

935

851

Diluted

984

862

942

860

Non-GAAP net income attributable to ordinary shareholders:*

1,300

1,165

3,568

3,560

Non-GAAP net income attributable to ordinary shareholders for
diluted earnings per share:**

1,364

1,165

3,764

3,560

Non-GAAP earnings per share attributable to ordinary
shareholders:*

Basic ($)

1.33

1.37

3.81

4.18

Diluted ($)**

1.31

1.35

3.76

4.14

Non-GAAP average number of shares (in millions):

Basic

979

851

935

851

Diluted

1,044

862

1,001

860

* See reconciliation attached.

**Dividends on the mandatory convertible preferred shares of $196 and
$64 million for the nine and three months ended September 30, 2016,
respectively, are added back to non-GAAP net income attributable to
ordinary shareholders, since such preferred shares had a dilutive effect
on non-GAAP earnings per share.

Condensed Consolidated Balance Sheets

(U.S. dollars in millions)

(Unaudited)

September 30,

December 31,

2016

2015

ASSETS

Current assets:

Cash and cash equivalents

1,557

6,946

Accounts receivable

8,071

5,350

Inventories

5,349

3,966

Deferred income taxes

-

735

Assets held for sale

1,057

-

Other current assets

1,352

1,401

Total current assets

17,386

18,398

Deferred income taxes

1,065

250

Other non-current assets

2,064

2,341

Property, plant and equipment, net

8,379

6,544

Identifiable intangible assets, net

29,557

7,675

Goodwill

40,296

19,025

Total assets

98,747

54,233

LIABILITIES AND EQUITY

Current liabilities:

Short-term debt

3,676

1,585

Sales reserves and allowances

7,797

6,601

Accounts payable and accruals

4,953

3,594

Liabilities held for sale

327

-

Other current liabilities

2,533

1,225

Total current liabilities

19,286

13,005

Long-term liabilities:

Deferred income taxes

7,862

1,748

Other taxes and long-term liabilities

1,392

1,195

Senior notes and loans

33,179

8,358

Total long-term liabilities

42,433

11,301

Equity:

Teva shareholders’ equity

35,129

29,769

Non-controlling interests

1,899

158

Total equity

37,028

29,927

Total liabilities and equity

98,747

54,233

Condensed Consolidated Cash Flow

(Unaudited, U.S. Dollars in millions)

Three months ended

Nine months ended

September 30,

September 30,

2016

2015

2016

2015

Operating activities:

Net income

410

116

1,285

1,099

Net change in operating assets and liabilities

1,047

(463)

1,100

703

Items not involving cash flow

4

1,440

1,415

2,125

Net cash provided by operating activities

1,461

1,093

3,800

3,927

Net cash used in investing activities

(32,301)

(136)

(34,943)

(5,272)

Net cash provided by (used in) financing activities

25,372

(1,090)

25,918

90

Translation adjustment on cash and cash equivalents

41

(7)

(164)

(43)

Net change in cash and cash equivalents

(5,427)

(140)

(5,389)

(1,298)

Balance of cash and cash equivalents at beginning of period

6,984

1,068

6,946

2,226

Balance of cash and cash equivalents at end of period

1,557

928

1,557

928

Non GAAP reconciliation items

(Unaudited, U.S. Dollars in millions)

Three months ended

Nine months ended

September 30,

September 30,

2016

2015

2016

2015

Gain on sales of business and long-lived assets

(693)

-

(693)

-

Legal settlements and loss contingencies

533

(80)

674

531

Amortization of purchased intangible assets

429

203

811

637

Acquisition and related expenses

337

61

449

218

Inventory step-up

152

-

243

-

Restructuring expenses

115

70

154

121

Costs related to regulatory actions taken in facilities

46

9

123

28

Contingent consideration

34

67

85

329

Equity compensation expenses

31

24

83

82

Impairment of long-lived assets

29

187

614

334

Other non-GAAP items

16

(1)

19

(8)

Other write-offs associated with the impairment of Zecuity®

-

-

53

-

Financial expense (income)

(1)

632

344

775

Minority interest

(22)

16

(65)

16

Corresponding tax benefit

(54)

(126)

(432)

(591)

Reconciliation between net income
attributable to ordinary shareholders and earnings per share

as reported under US GAAP to non-GAAP net
income attributable to ordinary shareholders and earnings per share

Dividends on the mandatory convertible preferred shares of $64
million for the three months ended September 30, 2016 are added back
to non-GAAP net income attributable to ordinary shareholders, since
such preferred shares had a dilutive effect on non-GAAP earnings per
share, as described in the following footnote.

(5)

The non-GAAP weighted average number of shares was 1,044 and 862
million for the three months ended September 30, 2016 and 2015,
respectively. The non-GAAP weighted average number of shares for the
three months ended September 30, 2016 takes into account the
potential dilution of the mandatory convertible preferred shares
(amounting to 59 million weighted average shares), which had a
dilutive effect on non-GAAP earnings per share. Non-GAAP earnings
per share can be reconciled with GAAP earnings per share by dividing
each of the amounts included in footnotes 1-4 above by the
applicable weighted average share number.

Reconciliation between net income
attributable to ordinary shareholders and earnings per share

as reported under US GAAP to non-GAAP net
income attributable to ordinary shareholders and earnings per share

Dividends on the mandatory convertible preferred shares of $196
million for the nine months ended September 30, 2016 are added to
non-GAAP net income attributable to ordinary shareholders, since
such preferred shares had a dilutive effect on non-GAAP earnings per
share, as described in the following footnote.

(5)

The non-GAAP weighted average number of shares was 1,001 and 860
million for the nine months ended September 30, 2016 and 2015,
respectively. The non-GAAP weighted average number of shares for the
nine months ended September 30, 2016 takes into account the
potential dilution of the mandatory convertible preferred shares
(amounting to 59 million weighted average shares), which had a
dilutive effect on non-GAAP earnings per share. Non-GAAP earnings
per share can be reconciled with GAAP earnings per share by dividing
each of the amounts included in footnotes 1-4 above by the
applicable weighted average share number.

Segment Information

Generics

Three months ended September 30,

Percentage Change

2016

2015

2016 - 2015

U.S.$ in millions / % of Segment Revenues

Revenues

$

2,904

100%

$

2,202

100.0%

32%

Gross Profit

1,466

50.5%

1,005

45.6%

46%

R&D Expenses

184

6.3%

132

6.0%

39%

S&M Expenses

415

14.3%

295

13.4%

41%

Segment Profit*

$

867

29.9%

$

578

26.2%

50%

Specialty

Three months ended September 30,

Percentage Change

2016

2015

2016 - 2015

U.S.$ in millions / % of Segment Revenues

Revenues

$

2,048

100%

$

2,178

100.0%

(6%)

Gross Profit

1,783

87.1%

1,859

85.4%

(4%)

R&D Expenses

228

11.1%

220

10.1%

4%

S&M Expenses

458

22.4%

417

19.2%

10%

Segment Profit*

$

1,097

53.6%

$

1,222

56.1%

(10%)

* Segment profit consists of gross profit, less S&M and R&D expenses
related to the segment. Segment profit does not include G&A expenses,
amortization, inventory step-up and certain other items.

Segment Information

Generics

Nine months ended September 30,

Percentage Change

2016

2015

2016 - 2015

U.S.$ in millions / % of Segment Revenues

Revenues

$

7,368

100.0%

$

7,289

100.0%

1%

Gross Profit

3,537

48.0%

3,487

47.8%

1%

R&D Expenses

445

6.1%

377

5.1%

18%

S&M Expenses

1,027

13.9%

1,004

13.8%

2%

Segment Profit*

$

2,065

28.0%

$

2,106

28.9%

(2%)

Specialty

Nine months ended September 30,

Percentage Change

2016

2015

2016 - 2015

U.S.$ in millions / % of Segment Revenues

Revenues

$

6,471

100.0%

$

6,224

100.0%

4%

Gross Profit

5,632

87.0%

5,345

85.9%

5%

R&D Expenses

702

10.8%

655

10.5%

7%

S&M Expenses

1,393

21.5%

1,360

21.9%

2%

Segment Profit*

$

3,537

54.7%

$

3,330

53.5%

6%

* Segment profit consists of gross profit, less S&M and R&D expenses
related to the segment. Segment profit does not include G&A expenses,
amortization, inventory step-up and certain other items.

Additional information

Multiple Sclerosis

Three months ended September 30,

Percentage Change

2016

2015

2016 - 2015

U.S.$ in millions / % of MS Revenues

Revenues

$

1,061

100.0%

$

1,085

100.0%

(2%)

Gross profit

982

92.6%

980

90.3%

0%

R&D expenses

20

1.9%

16

1.5%

25%

S&M expenses

76

7.2%

88

8.1%

(14%)

MS profit

$

886

83.5%

$

876

80.7%

1%

Other Specialty

Three months ended September 30,

Percentage Change

2016

2015

2016 - 2015

U.S.$ in millions / % of Other Specialty Revenues

Revenues

$

987

100.0%

$

1,093

100.0%

(10%)

Gross profit

801

81.2%

879

80.4%

(9%)

R&D expenses

208

21.1%

204

18.6%

2%

S&M expenses

382

38.7%

329

30.1%

16%

Other Specialty profit

$

211

21.4%

$

346

31.7%

(39%)

Additional information

Multiple Sclerosis

Nine months ended September 30,

Percentage Change

2016

2015

2016 - 2015

U.S.$ in millions / % of MS Revenues

Revenues

$

3,208

100.0%

$

3,063

100.0%

5%

Gross profit

2,930

91.3%

2,752

89.8%

6%

R&D expenses

65

2.0%

69

2.3%

(6%)

S&M expenses

246

7.7%

311

10.1%

(21%)

MS profit

$

2,619

81.6%

$

2,372

77.4%

10%

Other Specialty

Nine months ended September 30,

Percentage Change

2016

2015

2016 - 2015

U.S.$ in millions / % of Other Specialty Revenues

Revenues

$

3,263

100.0%

$

3,161

100.0%

3%

Gross profit

2,702

82.8%

2,593

82.0%

4%

R&D expenses

637

19.5%

586

18.5%

9%

S&M expenses

1,147

35.2%

1,049

33.2%

9%

Other Specialty profit

$

918

28.1%

$

958

30.3%

(4%)

Reconciliation of our segment profit

to Teva's consolidated income before income taxes

Three months ended September 30,

2016

2015

U.S.$ in millions

Generic medicines profit

$

867

$

578

Specialty medicines profit

1,097

1,222

Total segment profit

1,964

1,800

Profit of other activities

134

58

Total profit

2,098

1,858

Amounts not allocated to segments:

Amortization

429

203

General and administrative expenses

310

316

Impairments, restructuring and others

(410)

384

Legal settlements and loss contingencies

533

(80)

Other unallocated amounts

471

25

Consolidated operating income

765

1,010

Financial expenses - net

150

697

Consolidated income before income taxes

$

615

$

313

Reconciliation of our segment profit

to Teva's consolidated income before income taxes

Nine months ended September 30,

2016

2015

U.S.$ in millions

Generic medicines profit

$

2,065

$

2,106

Specialty medicines profit

3,537

3,330

Total segment profit

5,602

5,436

Profit of other activities

198

164

Total profit

5,800

5,600

Amounts not allocated to segments:

Amortization

811

637

General and administrative expenses

925

948

Impairments, restructuring and others

421

968

Legal settlements and loss contingencies

674

531

Other unallocated amounts

678

95

Consolidated operating income

2,291

2,421

Financial expenses - net

553

930

Consolidated income before income taxes

$

1,738

$

1,491

Revenues by Activity and Geographical Area

(Unaudited)

Three Months Ended September 30,

PercentageChange

PercentageChange

2016

2015

2016 - 2015

2016 - 2015

U.S. $ in millions

in localcurrencies

Generic Medicines

United States

$

1,293

$

1,032

25%

25%

Europe*

829

661

25%

31%

Rest of the World

782

509

54%

60%

Total Generic Medicines

2,904

2,202

32%

35%

Specialty Medicines

United States

1,558

1,701

(8%)

(8%)

Europe*

406

369

10%

12%

Rest of the World

84

108

(22%)

(20%)

Total Specialty Medicines

2,048

2,178

(6%)

(6%)

Other Revenues

United States

12

1

1100%

1100%

Europe*

175

169

4%

4%

Rest of the World

424

273

55%

95%

Total Other Revenues

611

443

38%

62%

Total Revenues

$

5,563

$

4,823

15%

19%

* All members of the European Union, Switzerland, Norway, Albania,
Iceland and the countries of former Yugoslavia.

Revenues by Activity and Geographical Area

(Unaudited)

Nine Months Ended September 30,

PercentageChange

PercentageChange

2016

2015

2016 - 2015

2016 - 2015

U.S. $ in millions

in localcurrencies

Generic Medicines

United States

$ 3,161

$ 3,797

(17%)

(17%)

Europe*

2,160

2,006

8%

10%

Rest of the World

2,047

1,486

38%

47%

Total Generic Medicines

7,368

7,289

1%

4%

Specialty Medicines

United States

5,007

4,802

4%

4%

Europe*

1,214

1,152

5%

7%

Rest of the World

250

270

(7%)

1%

Total Specialty

6,471

6,224

4%

5%

Other Revenues

United States

19

8

138%

138%

Europe*

510

508

0%

1%

Rest of the World

1,043

742

41%

67%

Total Other Revenues

1,572

1,258

25%

41%

Total Revenues

$ 15,411

$ 14,771

4%

7%

* All members of the European Union, Switzerland, Norway, Albania,
Iceland and the countries of former Yugoslavia.